big black mark. yetnother downgrade of our credit coming in weeks? is that possible? we'll talk about that. >> all right. he's being attacked for exposing the truth. the harvard professor taking heat for writing an op ed that condemns muslim terrorists. is it more political correctness gone too far? "fox & friends" starts right now. >> howdy, folks. welcome live to studio e where we're up an hour early because it is a busy morning. good morning to you, gretch. >> good morning, everyone. we have eric bolling sitting in for brian kilmeade. you know something about the markets. >> boy, are they wild right now? they're all over the place right now. we begin with fox news alert. look what's happening across the globe as the world reacts to

america's credit being downgraded. there's deep economic anxiety. i'll sigh that as at least a minimum, steve. >> absolutely. nikkei index finished down something like 2%. right now, i was looking at the european stock market and, you know, it's pretty much down one, two, almost 3%. and the dow right now is down, what, 238 points right now as we speak. so it's really moving lower. >> that's not good for us. for more reaction, let's go to fox news reporter jennifer davis joining us live from our d.c. bureau. good morning to you. >> good morning, guys. all eyes on the global markets today to see how they react to news of this s&p downgrade. u.s. stock futures have tumbled. asian markets down. what's going to happen on wall street? that's the million dollar question today. the news from s&p came after those markets had closed on friday. downgrade going from triple a status down one notch to double a plus. s&p says this is a reflection not only of the political

gridlock in washington and fact that the ratings agency doubts whether or not lawmakers can come together to work this problem out but also about the fact that they say that debt ceiling deal last week didn't cut enough. s&p wanted to see $4 trillion in cuts. we have not heard from the president publicly on this issue but the treasury secretary was out this weekend and he says this was -- this decision by s&p showed terrible judgment on their part. he said it was based on flawed math and so we will wait to see from -- and hear from the rest of the administration. the treasury secretary did take part last night in an emergency phone call with the finance leaders from other g-7 countries. the at this point, they're pledging to do whatever they need to keep it stable. tim geithner says he'll be staying on the job at the president's request. >> a lot of people are waking up and holding their hands to their eyes because they don't

want to look at the stock market. they're wondering what it means for their 401k's or even if they're mildly invested in the stock market. what do we know? >> you know, that's -- i would say reaction is really split on that. there are some people say this is bound to lead to a rise in interest rates for home mortgages, car loans, school loans but there's others who argue, look, this is not a surprise, that this had come out of the blue, maybe it would affect things. there are some who think there won't be that much of an effect long term. >> let's hope so. jennifer, thank you so much for joining us live from d.c. wall street opens in three hours and 30 minutes. it will be interesting to see how the market reacts to for the first time ever our credit rating being downgraded from triple a to double a plus but at the same time and she kind of touched a little bit about this, what's going on over in the euro zone which is a consortium of countries all propped together is the fact that italy and spain are in big, big trouble. and overnight, the european

central bank apparently has started buying bonds from italy and spain to prop up the governments. >> all right. so let's say the s&p downgraded america on friday night. everybody is waiting to see what's going to happen in asia. asian markets opened last night. and there was a 2% drop. through the night, somewhere around 1:00 in the morning eastern standard time, the european central bank came in and propped up spain and italy because there was fear that spain and italy were the next greece so they said come on, we're going to hold this up especially what's going on over there in the u.s. it held the european markets, united states market, dow was down 300 points at the time. >> in the futures. >> in the futures which is a good indicator of what's going on. it jumped back from 300 lower to 100 lower and now it's back to 235 lower. that's not a good sign. >> let me ask you this, if the central european bank can buy up the bonds and prop up spain and italy, can the united states government do something similar to try to avert a massive fall today in our own dow?

or do we not operate that way? >> i don't think they would do that. we'll be buying our own treasuries that they're issuing, taking money out of one pocket. >> those countrys are part of the euro, if you're spain, you can't print money. if you're italy, you can't print money. they're wishing they still had the lyra unlike the united states, when the going gets tough, we start pouring out more money. >> that's the difference between a spain, a france, an italy, and a greece and the united states. they can't print their own currency because they're part of the union, a european union. we can which is very interesting that the s&p downgraded us when the realities, you may not like us printing money but if we were going to print the money, we would be able to pay the debt so there's no indication that we would ever default on any of this debt so it's an interesting concept of downgrading us. >> the idea that you can continue to print money is part

of the problem. you have the flip side of that argume argument. let's take a look at the g-7, the top countrys in the world came together last night and had this emergency phone call. this was the statement. the primary focus of the g-7 calls was europe, the s&p stuff was broadly dismissed though there was general outrage expressed about the size and magnitude of their error and the fact that they acknowledged it and still went through with it. so this was the official statement coming from that call. now, do you believe, eric, that the s&p made an error in downgrading the united states? >> we're going on talk to the head. s&p group in a little over an hour or so. i think what they've done is i pointed this out earlier. lehman brothers, when they collapsed and went bankrupt and the government said go ahead, let it go, they were rated triple a by all three of the credit agencies. they got a black eye and got a second black eye when they found

out all the bundlgled mortgages that added to the downfall, they were rated triple a. somewhere along the line, they said we have to show we have guts in this game. problem is they went after us and went after the biggest economy in the world at a time when we were finally starting to turn the corner. very interesting time. >> sure, plus you can kind of tell from that little statement from the g-7, the group of seven countries is that it's broadly dismissed. you know, it's one of those things. really, the big fish to fry today is what's going on over in europe because italy needs a trillion dollar bailout. spain needs about $800 billion and these countries are so big and their financial problems are so vast, no single super power can bail them out and that's why everybody got on the phone last night. we're all in this together. >> big question today is who is to blame for all of this? i know you won't be surprised to

find out over the weekend, democrats and republicans blamed each other just like this. and this is one of the reasons how we got to this point to begin with. did you know that there's a 1 in 3 chance that we could be downgraded even more, even more? they better get their act together. here's both sides. >> i believe this is without question the tea party downgrade. this is the tea party downgrade because a minority of people in the house of representatives countered even the will of many republicans in the united states senate who were prepared to do a bigger deal. >> dysfunction in our system and a lot of it has to do with the failure of the president of the united states to lead. i would remind you that republicans control 1/3 of the government. the senate and the presidency are controlled by the democrats. and the fact is that the president never came forward with a plan. >> ok, so there you've got the democrats blaming the tea party. there you've got the republicans blaming the president for a

failure to lead. cokie roberts over on abc had a novel idea. she blames not bush but the constitution. >> and the problem that we have here is the constitution of the united states of america which actually does require people to come together from different perspectives rather than -- whether it's divided government or not. we have divided branches of government under any circumstances. >> there you go. one other sound bite of note and we're not going to play it because it's dirty is kristina romer was on that live hbo show where she says the country is pretty darned and then she used a word that starts with an f. so -- and she was part of the president's original team and she says we're pretty f'ed. >> kristina romer is one of the original writers of the bailout. don't worry if you give us $860 billion, unemployment won't go above 8%. >> how did that work out?

>> i think -- >> 9% is where we're at right now. these are stories making news on a monday. seven people have died after a crazed gunman goes on a shooting rampage in ohio. that gunman was eventually killed in a police stand-off. he first shot his girlfriend and then went next door and killed her brother and four others before taking to the streets. >> neighbor of mine seen the guy chasing the kid with the gun, shoot him, try to kill him. >> the candlelight vigil was held to remember the victims. one apparently was a child. no motive hack given, victims' names not yet released. violent riots no signs of slowing down in london as they continue to spread across the city. for the second night in a row, young people attacked police. so far, 160 people have been arrested and at least 35 police officers have been hurt. the riots began in response to the police shooting of a father of four in a london suburb.

more new details now emerging from saturday's deadly nato helicopter attack in afghanistan. u.s. officials saying that the chinook chopper like these that you see right here, this isn't the exact one, obviously. this is just video. it was on its way to help rescue army rangers when it was shot down. 30 americans were killed. 22 of them were navy seals, part of the same unit that killed usama bin laden. family members, of course, devastated. >> i just want people to know how much love he had in his heart for people. everybody. >> really loved what he did. and he was doing it for a reason, so america could be free. >> all the bodies have been recovered. they'll be flown to dover air force base later this week. insurance giant american international group is expected to file a lawsuit today against bank of america over bad loans. aig trying to recoup $10 billion

in lawsuits. aig accusing bank of america and its subsidiaries, merrill lynch and countrywide financial of misrepresenting the quality of mortgages sold to investors. and those are your headlines for a monday. >> you could also blame s&p. >> yeah. >> wow. >> very quickly, i'm going to throw this out here, aig was rated triple a credit until the government -- we, taxpayers, bought 80% of it and then they dropped the credit rating on it. thanks a lot, s&p. >> in europe, the mother of all bailouts is helping the u.s. but is there a down side? stuart varney answers that. he's coming into studio e. he'll be here next. >> could rick perry prayer in his prayer rally cost him his governor? the "mystery spot".

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for a day free of pain. and get the all day pain relief oaleve in liquid gels. >> blaming everyone but themselves. >> i believe this is without question, the tea party downgrade. >> the fact of the matter is that this is essentially a tea party downgrade. >> a lot of it has to do with the failure of the president of the united states to lead. >> s&p's track record has been terrible. and as we've seen this weekend, its arithmetic is worse. >> yes indeed. circular firing squad. who do we really blame and should we?

joining us, stuart varney. stuart, we had a whole array there from the tea party, blame the president, blame s&p. >> let's take it in order. first of all, it's the tea party's fault. i reject that. the tea party is the only group which came up with a plan which would have avoided this downgrade. s&p is getting the blame. they should not have downgraded america say various people speaking right there. s&p says we were downgraded because of the outlook for our debt. it's getting much worse. adding $7 trillion to the debt instead of $10 trillion. >> that's all true. >> that's why they downgraded us, ok? that's why they did it. i think that some responsibility, a lot of it has to be taken by president obama. it is his policies which failed to stimulate the economy and his spending policies which has driven us into this massive accumulation of debt. that's what i think is going on. >> within this report, it does blame both sides of the aisle because it also says that we should have paid more close attention to what the debt commission recommended which is

a combination of spending cuts and tax increases and they specifically talk about that in the report. >> look, s&p downgraded us because if you look out, then, not too far in the future, our debt situation gets worse and worse and worse. it's this debt to gdp ratio. sounds technical. but it's really all about our debt. how big is it compared to our economy? that's why they downgraded us. >> various ways to try to fix that. that's what i'm saying. depending on how -- where you stack up ideologically, you either believe in raising revenue or a combination. >> no, if you read that report, they come down very firmly saying you've got to get entitlements under control. suspe suspe spending on entitlements. that has to be a major part of the fix. they're saying we don't have the political will to reign in entitlements. that's a flat-out statement from them. >> we have the confluence today, this morning here in the u.s.

markets of the s&p downgrade. and then you've got what's going on over in europe right now and a lot of people have not been paying attention. they kind of heard with what went on with greece, problem with ireland. now you have the fourth and fifth biggest economies over there. italy and spain, they are teetering on bankruptcy and they've gotten together and they'll start buying bonds because otherwise, the floor is going to fall out. >> it is the mother of all bailouts. >> it is. >> you thought the wall street bailout was big at, what, $800 billion. this one is going to run into trillions of euros because they're not bailing out a couple of banks. they're bailing out two very large countries. >> how does this impact us? >> ok. what happens is as there's some -- some idea that maybe this bailout won't work. even though it's huge. maybe it won't work. so hot money looking for a safe haven comes here, goes straight into our treasury security, into

our debt. as of this morning, interest rates are going down. they're not going up. they're going down. >> this would be a good thing. >> that would be a good thing, yes, yeah. the other side effect is the price of gold is going through the roof this morning. it's up over $60 an ounce, has crashed through $1700 an ounce as we speak. now, that's because of what's going on in europe and this mother of all bailouts. now, it could cushion the wall street open a little bit but not much. we're looking to open down a couple hundred points. >> i'll be with you on the show when the dow opens at 9:30 eastern time. he's being attacked ain his hom and vandalized for the what he was saying about terrorists ♪ [ male announcer ] you like who you are... the man you've become. and you learned something along the way. about the world. and yourself.

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>> quick monday morning headlines for you. congresswoman gabby giffords' recovery has inspired the tucson, arizona safeway where she was shot. owners are reportedly planning a tribute in her honor. according to tmz, the store wants to hang a plaque commemorating her strength and fighting spirit. and no end in sight for this verizon strike. 45,000 workers from massachusetts to washington out picketing after they walked off the job early yesterday morning. right now, no new negotiations have been scheduled. the jobs that they had are being currently operated by retirees and management. >> thank you, steven. texas governor rick perry is under fire for leading a weekend prayer rally. some critics are calling it a political game and a risk for 2012. >> like all of you, i love this

country deeply. indeed, the only thing that you love more is the living christ. he is a wise, wise god. >> but could this prayer rally actually hurt his political future? joining us now, a democratic strategist and president and founder of momentum analysis and former minnesota senator coleman. let me go to you first. a day of prayer, day of repent, a day of fasting and rick perry says we need it. americans need it. do you agree or disagree? >> eric, we started an hour earlier today with the mess that we're in, do you think there are more than a few million americans praying for a little divine intervention? the mainstream media has this ongoing effort to characterize those who are proud of their faith as odd and frightening. i don't think that's true for the folks who choose republican nominee or for the folks in the heartland. bottom line in the parlors, in the bay areas of boston and san francisco, maybe new york and

washington, they may kind of laugh about those who cling to their guns and their faith but in america, i don't think it's a bad thing. the last guy to win a republican nomination or the caucus in iowa was a preacher. >> margy, what's wrong with a day of prayer? >> i don't think there's anything -- i agree with the former senator. i think that rick perry has been cleaning the clocks of the rest of the republican primary field and that's what this prayer rally showed over the weekend. i think he's going to -- and he's a great primary strategy. he may not have karl rove advising his campaign anymore but he's still working from flaybook whether it's for the appeal for the evangelicals but i think as a general election strategy though, he's going to have some problem. >> you're assuming this is a political ploy. you're assuming this isn't governor rick perry saying you know what? america needs a day of prayer. take a deep breath. things are bad.

maybe this can help a little bit. >> i watched video and people were moved and he -- his speech was not political. i agree with you. the timing, though, i think has the appearance of being political but i think the real issue for perry is not the day of prayer which i don't think is political suicide for the primary. i do think in the general elections, the comparison to former president bush as if, you know, cowboy politics, we tried it. it ended up with us in a recession or as we -- you know, it's difficult to get out of and independents, democrats and some republicans won't make that same mistake again. >> good or bad for the rick perry potential presidential run. >> i don't think leading a prayer rabble wri is going to get you a nomination. americans today are praying because of the mess we're in. i give you a little advice for rick perry as we know, jewish kid telling you chapter 2, verse 20, faith without works is dead. senator chuck grassley of iowa said if you want a nomination,

work like you're campaigning for sheriff. tim pawlenty is working, michelle bachmann is working. he's got to work if he wants this. faith is a good thing but in the end, you got to work and we'll see how the works play out. >> all right, amen, senator coleman and also margy, thank you for your time, you guys. >> thank you. >> bad credit rating about to get some company, another country's finances are headed down the tubes and chances are they'll take some of your money with them. and we're expecting a major announcement today from the white house ordering a major piece of legislation that was passed by president george w. bush, was it ignored? coming up. [ artis brown ] america is facing some tough challenges right now.

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are plunging to levels not seen since the mid 1990's. >> oh, man. >> really is a global economy as far as how it affects the rest of us, correct? >> sure, and of note, the greek shares of greek bonds are plunging because the ecb, european central bank decided to bail out spain and italy but left greece alone. >> what about us? >> it's actually put a little bit of a bounce in our stock market. however, i'm looking to the futures right now. 254 points lower and that's only 6:30 in the morning. we have three hours before new york opens for a full trading. my hunch is as we go throughout the day, we're going to see the lower and lower pricing. >> it's midday over in europe right now where the stock exchanges over there are down to a little more than 2% on the day. the french stock market is one of them, i think it's down close to 3% at this point. there's a story out there that while it has triple a rating currently, france, the country of france could be the next to

lose its rating. a number of people said we don't know why france has had triple a rating anyway because it's not a triple a kind of country. among other things, when they're in big trouble, they can't print their own money. >> isn't the triple a rating solely based on the relationship between gdp and debt? >> no. unfortunately, it's not. i mean, you make a great point. the ability to pay your debt is solely dependent on gdp vs. how much debt you hold. but for some reason, the s&p and moody's, they have different metrics on how they rate. but for some reason, they tied in the infighting between the left and the right political factions in america so their rating. which really, in essence, gretchen, it doesn't have anything to do with our ability to pay. it has everything to do with our ability to get along but certainly doesn't have any reason for -- shouldn't weigh into a downgrade. >> and the country of france certainly has run up its share of debt. currently, i think their ratio of debt to the gdp is 85%.

here in this country, our country has a -- our debt to gdp is at 100% and then you look at italy which is clearly at full crisis mode, they're at 120%. so they're spending 120% more than they take in. >> let's take a look at the other countries that currently still have the triple a rating. they are australia, austria, canada, denmark, finland, france, germany, hong kong -- is that considered its own country now? luxembourg, norway, singapore, sweden, switzerland and the u.k. so now at least according to s&p, the united states does not stack up against those other countries. >> so we're not triple a anymore. let's take a look at our new company. let's see who is in the double a plus rating as you can see right there. us, belgium, new zealand.

now, worse than that is just flat out double a. that would include bermuda, kuwait, slovenia and spain and spain is in full crisis mode. >> very important to point out, let's take a look at double a minus rating. china, japan, israel, saudi arabia and taiwan. not only did s&p on friday downgrade our debt, they put us on the watch list which means their next move is likely another downgrade. not back up to triple a like we want and we hope we can get back into a triple a but are the next six to 24 months, they're not even considering us into triple a. they're worried that we'll go to a double a minus. never know how far. >> it could take nine to 18 years to get back up to triple a. once you get downgraded. it's like your gpa. get a c in there, it's kind of

hard to scoot back up to the top level. >> this is one company. there are three companies out there. moody's & fitch still have us at triple a so what does that say -- >> point something out -- >> mixed bag. that's very important that we -- that the community, investing community around globally is dependent on these three companies' ratings. believe it or not, there are funds and pension funds and institutions that say well, we're only going to buy triple a rated moody's, fitch and s&p instruments. whether or not you believe them or like how they come up with their metrics, we're still dependent on those ratings. >> if you looks at france right now which is triple a or the united states which is double a plus, which would you buy as an investor? >> there's no question i would go to the u.s. there's so many reasons, things you may not like.

the government can take g.e. and say it's ours right now. you may not like the practice but the ability. there's no way we shouldn't be a triple a or quadruple a rating. >> wow. that's a five star, right? >> that's five. thanks. >> let's listen to one of the president's top advisors, david axelrod because he's in this blame game. by the way, who do you blame? let us know. you can e-mail or twitter. david axelrod says he believes his boss, the president of the united states bears no responsibility for this downgrade. listen to this. >> are you saying that the president bears no responsibility for this? that this was all the fault of the other -- of the other side? >> listen, bob, what i'm saying is review the history of what happened here. i think first off, people are less concerned about that than where we go moving forward but let's look at the history of this. the fact of the matter is that this is essentially a tea party downgrade. the tea party brought us to the brink of a default.

>> but the history, see david axelrod points out that important word here, history. and if you look back in history, this country has been spending, spending, spending, spending. at least for the last couple of decades. so is it really in your mind, the tea party who has been in existence for two to three years, is it their fault or is it the fault of all the spending that preceded that or a combination? >> it's interesting that particular interview yesterday with bob schieffer, bob let them have it. one of the first questions to axelrod is why does barack obama deserve to be re-elected considering that the economy is in much worse shape than when he took the presidency? and then it went from there. >> and the funny thing is axelrod and the obama administration keeps pointing the finger at bush. it's bush's fault and you inherited this. you inherited a triple a credit rating and somehow turned that

into a downgrade. >> i'm sure he's watching right now. >> couple of headlines for your monday. the tsa apologizing after refusing to let a pregnant woman through denver international airport with her insulin. she's asked not to be named. >> it's like excuse me? and he's like, i can't tell you why again but this is at risk for explosives. you got needles that are syringes so yeah, i can't take through my actual insulin. >> all right. so apparently the tsa apologizing but also questioning the woman's story saying "we talked to all our people and they didn't touch her insulin." that doesn't sound like an official statement. that's what it is. >> the obama administration is announcing states can be given waivers for the no child left behind law. education secretary arnie duncan says they grant waivers to

states that have college standards. states have apply for the waiver. secretary duncan will decide which states get the waivers. >> the 2011 volkswagen jetta is being looked at for leaks in the fuel line and the 2011 and 2012 ford mustangs are being looked at for possible transmission problems. the government says it's received about 32 complaints about shippifting problems for mustangs with manual transmissions. >> teens honoring their favorite celebs last night in los angeles. of course, that's harry potter keeping the magic alive. it won seven surfboards at the teen choice awards. topping "twilight." another big winner, taylor swift, country, that is. i thought that was a new name of some artist. no, it's country cutie, taylor swift. she took home five awards

including choice female artist. the 21-year-old says she's humbled. >> it's crazy to win things. i never used to win things. you know, before this started taking off. >> choice male artist went to justin bieber who, despite rumors of a breakup, was sitting next to girl friend selena gomez. apparently she doesn't like some of the people he's keeping company with. that's at least what rumors are saying. >> let's take a look at what kind of day we've got ahead on this monday. man, is there a lot of humidity in the air? it's muggy throughout the northeast. as you can see, we have widely scattered showers all the way from maine down through the piedmont area and heavier stuff in the dakotas and nebraska and the central plain states and down along the gulf coast. currently, as you step out the door, wherever you're heading, it's already beyond room temperature in new york city. 74 was the temperature at 2:00 in morning. same as raleigh and there is a considerable amount of humidity

factored into that. 78 right now in memphis. we're already at 88 in dallas. about the same for tampa. out west, 50's and 60's. later on today, dallas zeroing in on close to 40 days in a row beyond 100. today, they should top out at 106. they could really use a big old-fashioned thunderstorm that lasts about 12 hours. meanwhile, just with the rain, they certainly need it because of the drought conditions. 104 in san antonio, 103 in el paso. mid atlantic, temperatures close to the century mark. 98 in raleigh. it should top out at close to 90 here in new york city. it will feel north of that if you factor in the humidity. northern plains, temperatures in the 80's. if you're out in san francisco today, 65 will be your daytime high. and that's your fox travelcast. >> coming up on our show, a harvard professor under attack for telling the truth? meet the professor in trouble for what he said about muslim

terrorists. >> and what's mexico doing sending its soldiers into texas? how they got busted landing on the u.s. military base. >> it happens. ♪

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there's a new cologne called patton. it sells for $25 on amazon. steven? >> i love the smell of patton in the morning! i digress. a harvard faculty member is under fire after publishing an article in response to the july attacks in mumbai. in an op ed he wrote in july, he calls for political action to combat islamic terrorism in india. just yesterday, his home in new delhi was vandalized. while many are calling for him to step down, he insists he's doing nothing wrong by speaking out. he's the president of the party in india. and he joins us from boston. good morning to you, sir. >> good morning to you. >> so what was it that you wrote that was so incendiary that people are saying you need to be arrested in india? >> well, i think first of all, it's -- their anger is not

genuine because i would say close to 80% of india through tweets and facebook through newspapers have supported that and i've essentially said we need to device a counter strategy for terrorism. we are having about 20 attacks of terrorism per year. india is probably the most terrorist inflicted country. we got to do something about it. and i argued that we need to deter the terrorists because they have political goals and we should nullify those. >> what you wrote is you said we as a country in india need to stand up against islamic terrorists. what's the matter with that? >> well, that's not the reason for the anger. the anger is that the -- i have class action in the supreme court on corruption issues since many of the ruling ministers and prominent politicians to jail and it's getting very close to

the head of the party namely gandhi. >> what's happened since you wrote that, a number of people in india have said that you should be arrested, people say that you should be fired from harvard. and your house was just ransacked. >> that's right. it was ransacked by congress hoodlums and there is now a report by the police, i hope they will investigate but it's very well established they were congress people by those who are eyewitnesses and my security was withdrawn by the state sometime ago by this present government. so i think these attacks have been facilitated. >> you're talking a lot about the dynamics and the politics of india but there have been some who have called for you to be fired from harvard. you've got to feel good that harvard has stuck up for you and said, we're sticking with him. >> well, i'm very proud of

harvard because i have a very long association of nearly 50 years with harvard. and they stood up for freedom of speech. i think that's a beacon light to the whole world. i think they're very good to harvard and to me. >> there you go. your op ed was absolutely right. people have got to stand up to islamic terror. you just wrote the right thing and now you've gotten in trouble over there. we thank you very much for joining us today from boston. >> yes, thank you very much. >> pleasure to meet you, sir. thank you. all right, next up on the rundown, how can the united states earn back the triple a credit that we lost on friday night? will the burden be placed on american small businesses in the form of higher taxes. then president obama borrowing from president reagan again and again? you've heard it. but he's not getting the same response so is it the speaker or is it the message? dana perino, former press secretary to george w. bush says it has to do with integrity. she joins us at the top of the

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>> welcome back, everyone. wall street set to react to s&p's downgrade to the credit rating a few hours from now. small businesses across the country bracing for the impact this will have on them. here with a perspective on this is the chairman ceo of ama enterprises. good to see you. >> thank you. >> i know you've had a visceral reaction. you're very angry as a business owner, why? >> i'm livid. i'm livid. the first rule of leadership is to take responsibility. the constant finger pointing back and forth across the aisles is absurd. the first thing the president should have come out and say is apologize. this happened on my watch. it is not relevant how he got

into the problem. it is his problem. and that -- i don't know if you read the fine print on the job description but this is what ceo's do, we get problems each and every day. we do insurmountable obstacles. we bring teams together. >> you would no longer be in a business in a two decade old business if you kept blaming people and didn't take charge. >> absolutely. because you won't stand that long as a ceo. that's my job as i move from company to company and all the different things that i do, people trust me as a leader because they know what i'm going to do even if it is impossible to win, what they know is i'm going to lead to the best end result. right, and also being able to get diverse minds around the table. a good ceo does have people around them that don't get along. that is what a board is supposed to do. so the fact that they fight, they're supposed to fight but at the end of the day, you're supposed to make the best decision given the information and lead. >> now, i know you tend to agree with the s&p down grading. some critics out there say they shouldn't be saying anything. they said subprime mortgages

were also triple a. >> it's ludicrous. if our country was a business and i said to my investors, i'm borrowing more than half of what i'm spending, i have no leadership. i have no plan and it absolutely is not going to be my fault? do you really think -- what would happen -- i'd be out of business already. of course, this is what they needed to do. remember, they don't make decisions just for us. they make a global decision to say where is our best investment and they said -- i don't know why anybody is surprised. they said if you don't do these things, right, they gave us a cheat sheet. if you don't do these things, this is what's going to happen. so we sit back going i can't believe it happened. are we arrogant or stupid? >> $4 trillion in cuts is what they wanted. the effects on small business will be devastating. >> devastating. not just on small business but employees. we carry the brunt of the weight. don't confuse small businesses with g.e. and the big, big massive companies. those are not the companies that

are going to do the onesy, twossy employees. we're already strapped. when we ask our employees, we desperately are working them. we've been working them like dogs for years now and not paying them so we're saying do you want us to bring in somebody else so we can lessen the load? they say no, absolutely not. let's hang in another quarter. let's hang in here another quarter and for consumers, consumers are going $2 used to be for milk and now it's $4. a can of coffee used to be $6. it's $13! people who don't have that extra $10 are going to say you know what? i'm going to walk away from my home. i am going to walk away. you're making it easier for people to quit. >> fired up about the whole situation, she runs a company and knows what she's talking about. great to see you this morning. thank you. with the economy only getting worse, should tim geithner get to keep his job as treasury secretary? i think she would have an opinion on that. we'll ask dana perino. she'll weigh in top of the hour. what's on jackie kennedy's secret audio tape?

her theory on who killed her husband. theory we never heard before and other amazing stuff coming out of those tapes.

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astrazeneca may be able to help. >> good morning, everyone. it is monday, august 8th. i'm gretchen carlson. thank you for sharing an important day with us today. while you were sleeping, our debt crisis gave the world markets a shock. what's about to happen on wall street in the united states? and what does it mean for your money and your 401k? >> it's been days since the first downgrade in u.s. history and still, no statement from the president. does he have more to gain by staying silent? dana perino here to weigh in. steve? >> the white house channelling the gipper a lot these days and you heard it. >> ronald reagan, ronald reagan was a strong, conservative. >> we agree with ronald reagan. and many others that we cannot default. >> white house is agreeing with ronald reagan? america is not buying it, pal.

the president put too much stock in his power of persuasion. we're going to report and you are going to decide. "fox & friends", 7:00 eastern time for a monday starts right now. >> good morning, everyone. thanks so much for sharing your time with us on an important day. good to have you. we want to get right to the top story because the fox news alert is how was the world market reacting overnight to the s&p down grading to the credit rating to double a. from asia to europe, there were serious worries about what would happen when the markets opened. asian markets were down across the board with indices in japan and china down more than 2%. south korea down 3.8%. meantime, european markets lost early momentum. trading is sharply lower. continue to discuss that after the rest of the headlines.

seven people have died after a crazed gunman goes on a shooting rampage in coply, ohio. that gunman was eventually killed in a police stand-off. he first shot his girlfriend and then went next door and killed her brother and four others before taking to the streets. >> then a neighbor of mine saw th syoting him trying to kill him. >> a candlelight vigil was held to remember the victims. one apparently was a child. no motive has been given. victims' names are not yet released. new video out of london. check out the chaos going on there as violence, riots and everything spreading across the city for the second straight night. they're smashing store windows in a number of neighborhoods. so far, 160 people have been arrested. at least 35 police officers have been hurt. the riots began in response to the police shooting of a father of four in a london suburb. more new details now emerging from saturday's deadly nato

helicopter attack in afghanistan. u.s. officials saying that the chinook chopper like those in this video was on its way to help rescue army rangers when it was shot down. 30 americans were killed. 22 of them navy seals, part of team 6. the same unit that killed usama bin laden. family members are, of course, devastated. >> i would just want people to know how much love he had in his heart for people. everybody. >> really loved what he did. and he was doing it for a reason so america could be free. >> all of the bodies have been recovered and will be flown to dover air force base later on this week. how about some music to get her going? diana nayad playing a little trumpet before swimming more than 100 miles from havana, cuba to the florida keys.

>> wow, the 61-year-old trying to become the first person to cross the florida straits without the help of a shark cage. she's relying only on the technology and divers. >> i'm standing here at the prime of my life, i think this is the prime. when one reaches this age, you still have a body that's strong but now you have a better mind. >> touche. she attempted the swam similar in 1978 but had to stop because of some strong currents. she had a little bit of a respite there. 1978 to 2011 but looking strong and looking good. >> sure, she's a legend. let's bring in the legendary dana perino. >> very nice segue. thank you very much. >> we're on the couch with your buddy from "the five" eric bolling. dana, so the bad -- we got the bad news on friday night where our triple a credit rating was downgraded to double a plus.

we still, while we've heard from the surrogates. we still have not heard from the president of the united states. this is gigantic! >> right. so i think there's one of two things going on. one, if i'm being charitable, they are considering that because s&p is being pretty much degraded themselves or downgraded themselves by others saying it went too far. they made a mistake. that the president is not going to dignify it with a response. the weird thing about that to me is i don't think that's working. president obama has commented on everything. talked about local politics and the whole reason we had the beer summit. he's always talking. he never stops talking on tv and this is something he doesn't talk about? i think that the white house missed huge opportunity. the president's radio address that runs every saturday morning is the biggest megaphone, there's no filter. the millions and millions of people listen to it. and it's a great way to drive the news. now, i know they tape the radio

address thursday afternoon or friday morning. but they could have done that radio address live. and they could have done something else. instead of immediately dividing people and using the talking points of the tea party downgrade which is so pat it makes people, you know, roll their eyes. what they could have done is pulled together people from all different walks of life from the various far right and far left part of the party and brought them together and said you know what? s&p just screwed up on america. and i don't think we should let that stand. >> i'm watching the stock market, the futures market kick down 250 lower right now. a lot of finger pointing is going on in the obama white house at your former boss george bush saying we inherited that recession and all that malaise. guess what they inherited from you and your boss was a triple a credit rating, weigh in on the first ever downgrade of american debt. >> well, the blaming bush stuff is kind of expected.

kind of annoying. if they think that they're going to go into this next election year and that they could win once again by blaming bush, i think they're mistaken. but the other thing is, i think that -- let's back up here. this is not a republican or democrat thing. we have built up spending that we cannot afford. we have too few workers working too few years in order to pay the entitlements we've promised to people that we say don't touch our medicare. that's really the problem and it's unfortunate the first thing they did was want to divide people. >> let me ask you this. what got lost in the shuffle, you said two questions ago, am i correct in thinking from you that you think that the downgrade was a mistake by the s&p? >> i don't have -- i'm not an economist with the s&p but i do think most people think they jumped the gun. there was $2 trillion mathematical error they made on friday that the white house and treasury was trying to get them to correct. the other ratings agencies have

kept america at a triple a rating and the g-7 came out and said that standard & poor's got it wrong. to your point about watching the stock market, eric, the white house worked feverishly over the weekend to make sure people knew that u.s. debt is a safe bet. >> one of the things that's been quoted over the weekend is whether or not treasury secretary tim geithner should stay or go. he came out and said i'm staying. take a listen to peter earlier today on his thoughts about secretary geithner. >> nobody really respects tim geithner. and the fact that the president used him as his most valued economic advisor, most valued advisor overall along with hillary clinton doesn't speak well for the judgment of this president or with this administration is going to get america going forward. >> yeah, the professor is not a big fan of geithner. but -- >> yeah, i think it's a little strong. >> in reading your information, it sounds like you think this would be a bad time to switch

horses. >> here's what i think. having worked at a white house and watched a president with all of his senior advisors with different people calling on different ones to resign, secretary rumsfeld comes to mind. it's the president's decision who he wants to have advising him. i don't necessarily think there's no respect for timothy geithner. i respect him. i do think also because of this s&p downgrade where the rest of the world is saying hold on a second, even though we think america's finances aren't in the best shape, we don't think the downgrade was warranted, to have, you know, to kick him out now would be bad. there's another reason, i think, that president obama wants him and it's political. if tim geithner were to leave right now, there would be tremendous pressure on the white house to nominate a treasury secretary who is more favorable to big business. who wouldn't be willing to attack the banks, who wouldn't want to do the class warfare, who would want to do the right thing when it comes to economic growth. and i don't think that they want to go through that. they want a steady ship, they

think he'll take them through to re-election. i don't think that's a winning strategy. >> it would be admitting like a mistake had happened. that he hadn't done a good job. >> right. >> so coming up, dana, we just do a little promotion here. we have the director of the s&p ratings agency john chambers who will be joining us just about 35 minutes from now at 7:45 a.m. i want to get your analysis for this. for about the last six to eight weeks, the democrats have been trying to compare president obama to president reagan. and i guess that the similarities there are on the oratory skills between president reagan and president obama. but when it comes to policy, they really don't share that many similarities, do they? >> certainly not on policies and not on approach. i'm in the minority. i think that president obama's speech in 2004 at the convention was a barn burner, fantastic. who is this guy? his speeches recently have been

flat. it's like the myth about eating chinese food that as soon as you're finished eating about 10 minutes later, you're hungry because you realize there was no substance in the meal. that's how his speeches have been. i mean, the most memorable line from his primetime address the other night was call your congressman? that's really what you're going to say from the east room. so i think that here's the thing that is the biggest difference. yes, policy. but let me tell you about approach. i talked to my friend rory cooper at the heritage foundation about this. that is reagan built bridges. he did not burn them down. and that's, unfortunately, what's happened with their first instinct at the white house is to divide everybody up into these different corners and it's not helping. they missed a huge opportunity to pull people together. i think that's what ronald reagan would have done. >> american people are smarter than that. everybody knows that president reagan was about smaller government and he was about reducing taxes and he did that. what it ended up doing is had helped increase the economy.

obama has done nothing like that. he's talked about spread the wealth, spread the prosperity. i said i make a few extra hundred thousands bucks a year, i could certainly pay more. all of it. there's nothing reaganomic about obama-ics. >> i wasn't going to disagree on that but on one thing. there was a whole generation of people growing up that don't know about ronald reagan. when they hear the white house saying they agree with ronald reagan, they don't know. that's why there are some reagan conservatives who are looking at this a little bit in dismay thinking hold on a minute, we'll set the record straight. >> great point. dana perino, a regular on "the five" with that guy -- >> coming up there right now. >> go hop on the choo-choo. >> she'll number the bar car by noon. >> a theory we have not heard

before. jackie kennedy reveals who she thinks might be behind her husband's assassination. >> peter johnson jr. says america has done it before and we can do it all over again. it's all about a much ignored american natural resource coming up. [ female announcer ] so you think your kids are getting enough vegetables? maybe not. v8 v-fusion juice gives them a full serving of vegetables plus a full serving of fruit. but it just tastes like fruit. [ male announcer ] get five dollars in money-saving coupons at v8juice.com.

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>> all right. after a weekend of the white house attacking standard & poor's and pundit wringing their hands about what the market will do today, we can let -- we can't let fear get the best of us. fox news legal analyst peter johnson jr. is at wall street's federal hall in shadow of the new york stock exchange and says we should now be relying on the most ignored natural resource. welcome, peter. what is that natural resource that we have in america? >> good morning, eric. the most ignored natural resource in america is us. the american people. and it's time now for the american people to stand up and step in now that you're leadership has failed us. you know, based on the standard & poor's downgrading of our bonds, of our debt here in the united states, it's obvious that president obama is a one term president.

it's obvious that senator reid's leadership in the senate will be changed in the next national election. but that's not enough. we had a history in this country and i stand at the historic intersection. right ahead of me is federal hall where george washington was inaugurated. behind me is the new york stock exchange. the power of america is confidence. the power of america is the ability to be exceptional under the worst, worst circumstances. here at federal hall, early in the 20th century, americans rallied behind liberty bonds. they said that america had to fight the great, great war. now, we're fighting another great, great war in this country. for our own economic survive. -- survival. so i've heard all the pundits. you've heard all the pundits. we've heard all the prognosticators and the people at standard & poor's who say we're not good enough to be trusted.

now it's time for the american people to stand up and say yes, we have confidence in ourselves. yes, we can be trusted. yes, we will invest as little as $25 of our paychecks in treasury direct. yes, this is a triple, triple, triple a plus, plus, plus country going forward. so even though the leadership in the white house has abandoned us, even though standard & poor's which has a horrible track record in letting economies go down around the world are naysayers, we have the ability now as americans to say we have confidence in ourselves. we have the confidence to be inspired by the people who died over the weekend in afghanistan. brave, courageous, navy seals. they stand for the confidence of america. they stand for our future. they stand for our ability to stand up and move ahead and move from within when our president leads from behind. >> all right, peter johnson jr., absolutely, sir, we're triple a

rated as a country. american spirit, triple a rating even though s&p downgraded, the obama administration today. >> should we blame -- >> thank you, peter. >> should we blame this crisis on our founding fathers? >> and the problem that we have here is the constitution of the united states of america. >> what? we'll explain her comment coming up. plus she's a pintsized screen queen. 11-year-old actress bailey madison, star of the new movie "don't be afraid of the dark" is here live coming up. [ p.a. announcer ] announcing america's favorite cereal is now honey nut cheerios! yup, america's favorite. so we're celebrating the honey sweetness, crunchy oats and... hey! don't forget me!! honey nut cheerios.

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>> 22 minutes after the top of the hour. let's do news by the numbers. first, the number 70.

70 law enforcement web sites in southern and central united states are hacked again by a group known as the name anonymous. addresses, social security and credit card numbers all taken. next, $10 billion. that's how much aig says it lost in bad mortgage investments with bank of america. they're now suing the bank claiming the bank misled them over the quality of those mortgages. finally $54 million. "rise of the planet of the apes" took the box office this weekend. "cowboys & aliens" came in second. speaking of movies -- >> that's right. you know adam sandler's pretend daughter, you know her as in the comedy "just go with it". >> $600 for the day. plus overtime if we go over eight hours. i'll do my own hair and make-up and i want you to pay for the six visits at acting camp that my mom can't afford. >> what an operator. that is 11-year-old actress bailey madison. she's got a new role, it's nothing funny like that.

she plays a little girl who hears voices in the basement in the scary movie "don't be afraid of the dark." >> what is the matter with you? >> bailey madison joins us live right now. you're not supposed to open that thing up. >> i know! >> that's where the monsters are. >> i didn't know that then. i thought they were my friends. >> so you're in a really different kind of a role in this movie. by the way, you're with katie holmes who plays your dad's girlfriend. >> yes. >> right? i want to make sure i get that straight. here's a photo of the two of you. i understand you did a little babysitting on the set as well or played with suri. >> i played with suri, yes, it was a very dark and kind of eerie movie on set as well. any time we had a break, we'd go and run and have dance parties

or cupcakes or paintings so i definitely got my side of the kid on. >> making a monster movie. let's have some cupcakes. >> was it scary filming the movie, too? were you scared in some of the scenes? >> well, it was really different for me, you know, it was totally new. i wasn't used to having that kind of environment so for me, when she finally kind of got into the character, it was hard to come off. after i had the sundae, it wasn't scary at all. chocolate can cure everything. >> you're only 11 years old and you've just -- you say it like it is. you're like i'm still scared when i go to sleep at night. >> i am. >> what do you do? >> i have to have either my bathroom light on or night light. i have to. no matter what. i don't like the fact of not seeing anything. >> i have news for you. i'm in my 50's, i do the same thing. >> high five. there we go. >> good girl. in addition to being a movie star, that movie, i saw the trailer last night. it is terrifying. comes out at the end of this month. >> thank you. thank you. >> you are big with lemonade

now. tell us about alex's lemonade. >> it's to help fight childhood cancer and to fight -- to get childhood research going. it's about a little girl named alex who was diagnosed with cancer who sadly passed away and her mom and her dad keep on passing on the tradition. >> what are you doing with it? >> i'm starting my own lemonade stands and i just want kids to start, you know, realizing that they can make a difference at any age and it's super possible. it's super easy and it's fun. >> her parents have been on our show before. >> have they? they're wonderful. >> lemonade stand on the plaza here. i don't know if you've heard in the news, bailey and my kids love to do the lemonade stand, too, after i started hearing about these stories, i was like oh, my goodness, i think you have to have to get a permit. >> i did. i had to do it in florida and go through all the same things that everybody else has to go through. there has been some stands that have been shut down which is super unfortunate, you know, it's really sad because these kids are trying to make a

difference and we appreciate everyone who is doing that and going out there. but at the same time, it's the law so you got to follow it and check with your cities because everything is different. i know mine was and get some in your stand and you'll be good. >> you look a lot like katie holmes. >> thank you, she's gorgeous! i love her. >> i love how your favorite word is super. super everything. >> congratulations. good luck. >> thank you. >> next time, stay out of the basement. that's where the monsters are. >> thank you for knowing. ok, there we go. learn a lesson, note it to myself. >> bailey madison, thank you. >> the managing director for the s&p on why his agency downgraded the u.s. debt. >> jackie kennedy's secret audio tapes released early. who she thinks may be behind her husband's assassination and new secrets exposed. v8 v-fusion juice gives them a full serving of vegetables plus a full serving of fruit.

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>> stock futures are tumbling after s&p downgraded the u.s. credit rating for the first time ever. so is washington reacting? >> everybody has got an opinion. adam shapiro is live in d.c. with the very latest. it's the blame game and it's in full bloom, isn't it? >> it is in full bloom. people here are steamed up and it isn't the humidity that has them in a hot mood. washington wakes up wondering what kind of real world impact the credit downgrade will have on u.s. citizens? as ratings agency moody's now repeats its warning, this morning that it may downgrade the u.s. before 2013. moody's says that downgrade will take place if the fiscal or economic outlook weakens significantly. that's already happening in europe and also the u.s. downgrade and lingering debt problems in italy and spain motivated central bankers and finance ministers from the g-7 nations to hold a late night conference call to address the credit downgrade and turmoil in the market. the g-7 issued a statement

saying they remained committed to, and these are their words, take all necessary measures to support financial stability and growth and welcome the decisive actions taken here in the united states and europe. that statement referring to the plan to purchase italian and spanish government debt as well as the debt deals here in the united states but the deal was too little, too late to keep s&p from downgrading the u.s. and that's something treasury secretary tim geithner attacked on the sunday morning news programs. >> the s&p has shown really terrible judgment. and they've handled themselves very poorly and showed a stunning lack of knowledge about basic u.s. fiscal budget math and they drew exactly the wrong conclusion. >> really? said s&p's head of sovereign ratings, he defended the rating agency's decision. >> this country both congress and the administration are jointly responsible for the conduct of fiscal policy and so this is really not about either political party, it's about the

difficulty of all sides in finding, you know, a consensus around fiscal policy choices. now, and in the future. >> and one choice the obama administration won't have to make is who to replace secretary geithner with. he's going to stay on it until 2012. the president might say as one of the previous guests just a few minutes ago said, that's super great. back to you guys. >> i love it. you're watching the show at the same time. >> he's quoting 11-year-olds. that's the headline. >> we all want to be 11 again. all right, adam, thanks so much. let's carry the whole blame game topic to the curvy couch here because let's face it, the republicans and democrats did what they're fantastically and super good at over the weekend. yes, what did they do? they blamed each other! here it is. >> i believe this is without question the tea party downgrade. this is the tea party downgrade because a minority of people in the house of representatives countered even the will of many republicans in the united states senate. who were prepared to do a bigger

deal. >> there is dysfunction in our system and a lot of it has to do with the failure of the president of the united states to lead. i would remind you that republicans control 1/3 of the government as the senate and the presidency are controlled by the democrats. and the fact that is that the president never came forward with a plan. >> yeah, that's something that lindsay graham was talking about, the republican from south carolina yesterday on one of the chat shows. he said look, the president never had any policies that really addressed the issue. one quotation, he said, was if he were in the southeastern conference, he would be fired as a coach. he would not have his contract renewed. >> right. >> you know, also very important, a couple of weeks ago, debbie wasserman-schultz heads the dnc and says, you know, it's our economy now. the democrats, right. the -- a couple of months ago, obama said it's my economy now. guess what?

it's your downgrade, too, you guys. can't point the finger at the tea party or the republicans, this is all on them. they wanted it, they got it. >> i heard them blame bush. >> that's an opinion. you can tell by listening to the people that they put out, not the president over the weekend, he's not officially made a statement but the people that the administration put out to do the talking points, that was the number one talking point. tea party downgrade. and, you know, the more you say it, do people believe it more? does the president have to come out and say anything or can he just have people say that? because there's been so much discussion about the tea party and the whole debt ceiling issue, does that stick? let us know what you think. >> let me do this, then, they want to say tea party downgrade. i'm going to call it what it is. it's an obama-nomics thing. >> we're hearing from cokie rober roberts. she doesn't blame the president. she doesn't blame the tea party. she doesn't blame bush.

cokie blames the constitution, darn it! >> and the problem that we have here is the constitution of the united states of america. which actually does require people to come together from different perspectives whether it's divided government or not. we have divided branches of government under any circumstances. >> doesn't that make us america? >> oh, that little thing. >> yeah, constitutional -- you saw george will there. that was the back of his head. he was going like this. anyone who is a big believer in the constitution pretty much fainted after that particular part of the conversation. >> but the good news is we have the managing director of the s&p, the group that downgraded the u.s. coming up in about a couple of minutes right now. we'll ask him the tough questions that you want answers to. >> there's plenty of them. >> now the rest of the headlines for a monday. the tsa apologizing after refusing to let a pregnant woman through security at denver international airport with her insulin. the woman had asked not to be named. >> like well, you're a risk.

i was like excuse me? and he's like, this is a risk for -- i can't tell you why again but this is at risk for explosives. i got needles that are syringes and yebut yet, i can't take through my actual insulin. >> even though they're apologizing, the tsa is questioning the woman's story and said we talked to all of our people and they didn't touch her insulin. >> secret audio tapes by jackie kennedy onassis months after her husband's assassination are expected to go public very soon. on the tapes, jackie reportedly says she believes vice president lyndon johnson and texas oil tycoons had a role in her husband's assassination. she also admits she had an affair with actor william holden while in the white house. the tapes are supposed to remain sealed for 50 years after jackie's death. but caroline kennedy has reportedly agreed to release them early. steven? >> william holden? that's new.

meanwhile, playing sports in hot weather is safe for healthy children and teenaged athletes as well so long as precautions are taken. the new guidelines from the american academy of pediatrics comes a week after two georgia high school football players died following practices in very warm 90 plus temperatures between the years 2001 and 2009, more than 3,000 kids under the age of 20 received emergency room treatment for heat related illnesses from sports or exercise. >> g.o.p. presidential candidate john huntsman got his groove on during a stump speech in south carolina. check it out. here he is on the piano playing tunes for g.o.p. congressman tim scott and the song of choice, apparently they intended it for president obama. "hit the road jack". >> ♪ don't come back no more no more no more ♪ >> in his speech, huntsman

slammed president obama for his handling of the economy, even though he was his ambassador at one point to china. >> he's good. he should join us on our summer concert series on friday. we have barbecue. all right, straight ahead, you just heard john kerry blame the tea party for the downgrade. isn't it their fight against spending that actually saved us from default? they got the conversation going. tea party congressman allen west is joining us shortly. >> what if he signed a contract? steven tyler having second thoughts about american idol. >> the trivia question of this day. this tennis star has won more than $63 million in prize money during his illustrious career. who is he? be the first to e-mail us with the correct answer and i'm not sure what we'll send you. it will be great. it will be super.

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just don't feel like they used to. are you one of them? remember when you had more energy for 18 holes with your buddies. more passion for the one ya love. more fun with your family and friends. it could be a treatable condition called low testosterone or low t. come on, stop living in the shadows. you've got a life to live. [ male announcer ] so don't blame it on aging. talk to your doctor and go to isitlowt.com to find out more. >> quick headlines for you on this monday morning. no end in strike to the verizon strike.

45,000 workers from massachusetts to washington picketing this morning after walking off their job early yesterday. no new negotiations have been scheduled. and is jennifer lopez's new $20 million deal sparking some "american idol" envy? apparently so. sources say steven tyler is now asking fox for more money. but the aerosmith star already has a two year deal worth about $10 million but he wants jenny's deal. ok. gretchen, eric? >> fox news alert. wall street bracing for you for the fallout for the s&p downgrade to double a plus. the u.s. credit rating may get worse? s&p managing director john chambers warned there's a 1 in 3 chance of another u.s. credit rating downgrade in the next six months. >> john chambers joins us now. thank you, mr. chambers. so i have to get right to it, sir. what was it -- what was it that inspired the first downgrade in u.s. history by s&p? what was the thing that you sunk your teeth into? >> there were two things. they were related.

one was the politics. and although the political settings in the united states are still strong, they're not as strong as we had thought previously and compared to some other highly rated governments. there really is -- well, president obama who characterized the political system as dysfunctional, i think that's a good word. we got to a position where we were within 10 hours of having a major cash flow problem. this is not what happens in other countries. >> you're downgrading the u.s. on the politics? aren't you supposed to rate the debt on the -- on the institution's ability to service the debt? to pay the interest costs on the debt. >> that's the second aspect of the downgrade. the u.s. fiscal trajectory. right now, our debt to gdp has doubled since the great recession which in and of itself is not a motivating factor. so we need to have a medium term fiscal consolidation plan, i think, to keep the confidence of

markets and for, that you need policymakers who can take a pro active stance to grasp the -- put the public finances on a sustainable footing. >> mr. chambers, you had warned and warned and warned that this was going to happen and your agency wanted to see $4 trillion in cuts of any kind of debt deal that came forward. when that didn't happen, what was it like to be a fly on the wall in your office to do the downgrade? >> i don't think the action came quickly. we're not facing action on the revenue side or other side. that's elected policymakers to make. you need a figure of that same amount, the same figure that paul ryan came up, president obama came up with in his april 13th speech, everybody seems to coalesce around the

figure, you needed broad bipartisan support so you knew whatever deal you have now would stick regardless of which party was in power. >> mr. chambers, let's take a step back. you said one of the important factors that caused you to do the downgrade of the u.s. was our debt to gdp ratio. there are a couple of proposals out there that were floated one by congressman paul ryan who was looking to bring that number down and another one by a very big group, tea party included in d.c. called cut, cap and balance. had they balanced the budget, balanced budget amendment passed. would you have been able to downgrade u.s. debt? >> well, again, the problem with fiscal rules in the united states of which we have a long history is that usually when they come to the point of binding, they're relaxed and so the united states to begin with doesn't have too much credibility. >> i'm simply asking a question. if you had a balanced budget amendment to the constitution, would you be able to downgrade the u.s. debt? yes or no?

>> i think that what you would need is have confidence that would bind. >> some people say that the reason that this downgrade happened was because s&p was making up for bad ratings in the past years. for example, on subprime mortgages and such. is there any truth to that? how do you defend -- >> we've been in business for 100 years. we've been -- for 100 years, we've been rating governments. we've been rating corporations. we've been rating structured finance deals, you know, we stand by our record. obviously, we're disappointed with what happened with the mortgage backed securities. but, you know, it's not as if, you know, that influences decisions that we make forward. we try to move forward, adjust our -- our criteria and the way that we do things. >> when you hear the democrats saying it's a tea party downgrade, do you agree with that? >> i think there's lots of blame to go around and what we need to come to in this -- in the united states is a way of forging consensus. so that we can take the tough

choices that lie ahead because the fiscal situation in the united states is not sustainable. >> sir, you're not going to go ahead and say we won't be able to achieve triple a status again until we have harmony in washington. there's never been harmony in washington and frankly, there's been much worse economies. i remember jimmy carter with a double digit inflation and 7% or 8% unemployment number. that economy, that debt didn't get downgraded. yet, we're on our path to recovery and you downgraded the u.s. >> carter administration was in power, the u.s. government debt to gdp was less than 40%. now, it's 75%. >> that's fine. >> when you look -- >> i don't mean -- this is not partisan. this is really what's going on with the global economy. so if that's the case, if you balance the budget and balance the budget on an amendment, you can't add to the debt-gdp ratio, therefore you couldn't downgrade the u.s. i'm trying to get you to that point. >> i'll answer you in this manner. if the united states again gets

its deficits down and in doing so, assuming the economy grows, then your debt to gdp comes down, that would be positive for the credit standing of the united states. >> and did you assume that you would face the kind of criticism that you've faced since friday night with the g-7 saying what it said, that you made a big $2 trillion mistake? >> you know, we face criticism from governments every time we lower the rating. it's never a popular thing to do. but, you know, our job is to hold the mirror up to nature. >> all right. john chambers, managing director at the s&p, thank you very much for joining us. >> thanks for having me. >> democrats have branded this, as i just was mentioning, the tea party downgrade. weren't they the ones, though, who led the charge against stopping the spending or stopping the attempts to stop the spending, i guess is the better way to say it, tea party congressman allen west is going to respond to that next. >> on this day in 1999, the number one song was "genie in a bottle" by christina lag lag.

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>> the answer to the trivia question of the day, roger federer. congratulations. some democrats pointing fingers at the tea party for the u.s. credit downgrade saying their refusal, the tea party's to accept higher taxes, that's to blame. >> i believe this is without question the tea party downgrade, this is the tea party downgrade because a minority of people in the house of representatives countered even the will of many republicans in the united states senate. who were prepared to do a bigger deal. >> joining us now to react is

florida republican congressman and member of the tea party caucus, colonel allen west. thanks for joining us. what's your reaction to those comments by kerry and also axelrod calling the tea party down grade? >> well, good morning, steve and eric and i find those comments to be absolute most insidious things i've ever heard. i think what you continue to see from the left is looking for someone to blame. it's very simple. when we go back to 2007, when the democrats took over the house and the senate, the debt at that time was 8.6 trillion and now today we see the debt at $14.5 trillion. they have to look at themselves and they have to understand that they are the ones that are totally to blame. it has nothing to do with increasing revenues by tax hikes. it has everything to do with cutting in spending and one of the most important things we need to be doing right now is get back up to washington, d.c. and deal with this situation. and look for those deeper cuts, i think that when you can go back to cut, cap and balance which was something that the american people supported by 66%

to 70%. that's a great start. we can increase some of the immediate near term savings. we can look at some of those duplicative programs that the gao report sent out earlier this year and we can start righting this ship right now. >> sure. the problem is and this is what the tea party has brought to the forefront of our consciousness, congressman, we got too much debt. it's a math problem. bring it down, we'll eventually wind up with our -- with our triple a, again, perhaps, down the road a piece. let me ask you about this. it sounds like tim geithner has given us some good news despite the calls from people like jim demint, the senator from south carolina who says geithner has got to go given what's happened. mr. geithner said he's sticking around through the election. your reaction? >> well, i think having had timothy geithner sit before us and testify in the small business committee and had an opportunity to query him, when you open up that refrigerator door, the lights don't come on.

i think he should move on. >> what does that mean? what does that mean, the light doesn't go on? >> i don't think that timothy geithner really has a handle on the fiscal situation here in the united states of america. and i will tell you, when i listened to your s&p guest, it is about restoring confidence. it is about having the right type of economic and fiscal policies, taxation policies and regulatory policies that can turn things around. just this last month, the obama administration created over 600 new regulations that will cost businesses and corporations $10 billion to contend with. that's not how you heal this economy. >> we only have a couple of seconds. very quickly, would you be willing to come back to d.c. and tackle this thing and make headway on getting our credit rating back up? >> i'm more than willing to do that, you know, one of the things of being a soldier, you don't lay down your weapons when you're in the middle of a firefight and this is a big firefight and we should be back in washington, d.c. >> thank you, colonel. >> thank you. >> very nicely done. straight ahead, this high school

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>> gretchen: good morning, everyone. today is monday, august 8. i'm gretchen carlson. thank you for sharing your time on a very important news day. overnight, or credit crisis rocked markets overseas. what will happen now? in 90 minutes when wall street opens for business, all eyes on the u.s. markets. this time it's all of our money at stake. our 401(k)s, et cetera. >> steve: meanwhile, we already lost our stellar credit. did we really need this? china is on the phone and they would like to complain about the u.s. dollar. we'll see what donald trump has to say about that straight ahead. >> eric: put china on hold a second. when cares if they're building a tribute to thousands of americans lost on 9-11. the hotel next to the world trade center suing the

construction because of noise. isn't the hotel in business because of their location? "fox & friends" starts right now. >> steve: welcome to studio e live from new york city. we've had a special four hour show because we've got a lot going on. lucky enough to have eric policy policy -- polling with us. >> gretchen: investors in everyday america are wondering what the economic fallout will be. >> steve: let's talk to this guy. fox business senior correspondent who has been on the screen 30 minutes now. charles. a lot of people were panicked when they saw the israeli stock market sell off 7%. >> that might not have been based on this, what happened on friday in the markets. had a lot to do with playing

catch-up. i will say it does rub me a little the wrong way that a corporate beaurocrat has that much power on the market, or at least -- mr. chambers -- the stock market will take a big hit today. it will be down. if you look at the futures, anywhere between 200 and 500 pointsor points. the real issue is why is the bond market the least early signals up? why aren't people selling? why are people buying treasuries? the main thing that they rate? the reason why is no matter what s & p says, the u.s. credit is still the safest credit in the world. you would rather buy us than china. you would rather buy us than trinidad, any place else, you're buying us. >> gretchen: for the average american out there, what should they do? because a lot of the recommendations over the weekend were get into cash. >> i would be -- i'm not a bull on the market and i don't give people investment advice. i will tell you that. the stock market is trading less i think, on s & p and more on just general worries about the

world, about the u.s. economy. this economy is not growing. if you believe the economy will grow in the future, then you generally buy u.s. companies. but u.s. company, remember, they're globally diversified. they make a lot of money overseas. just because our economy isn't good it's -- they're making money. this could be a buying opportunity. >> eric: we need to be careful because the big downdraft in 2007-2008 when the stock market went from 12,000 to 6,000, 7,000, a lot of people -- >> that was actually 2008 to 2009. >> eric: so a lot of people said get out of stock markets and go into bonds. now hear that moodies may be downgrading. a lot of people are holding a lot of bonds that, will hurt them quite a bit. >> you would think so. but i will say remember, those are opinions of companies. the market renders the ultimate

opinion. the market looks at us compared to everywhere else. i'm telling you, we are still, the united states of america, we're still better than any place else. this is a big story in the financial markets. you got to be worried. but i think it's a bigger political story because the markets are going to adapt to this. let's think of it. there is an issue here, if all of them go down to double a 'cause then pension funds might have to sell. the political issue is huge. who gets the blame. >> gretchen: here is the thing n that interview with mr. chambers 15 minutes ago, he said that politics is one of the two reasons that they downgraded the united states of america. would that be the first time that politics would enter into the fray of what many people thought was a financial formula? >> i don't think these rating agency guys are the most articulate. they're very bureaucratcal. i think what he meant was britcal gridlock -- political gridlock is at heart. we don't have a plan to grow the economy. when you're stuck at economic growth of 1%, guess what?

less tax revenues come in. that's what he really meant. that's what we have now. this is a big election in 2012. pick a party. we need a coherent fiscal policy. it may be the president's way of doing it, which is sell a lot of bonds, but other economists say it wasn't big enough. or it's the republican plan that paul ryan best articulated, bring down all the tax rates, plug the loopholes and get businesses to start hiring again. those are two plans. you have to have coherence for fiscal policy and that's one of the reasons why he downgraded. he didn't put that into articulate words, but that's what he meant. >> steve: friday night he downgraded us. now people ask how we get upgraded. here is mr. chambers. >> if the united states can get its deficits down and in doing so, assuming the government economy grows and your debt to

gdp comes down, that would be positive for the credit standing of the united states. >> eric: assuming the economy growing. >> that is key. >> eric: we had a quarter of minuscule growth. >> more than that, this is a forward-looking rating. it's going forward. what they're saying is, we don't see the growth in the future, the growth that brings in the tax revenues that squeezes that budget deficit at some point. >> steve: is he right? >> he's absolutely right on that. that's the problem with shooting the messenger. you can beat up on s & p for a lot. they've missed every single financial crisis in the world. you got to ask yourself, what makes it's such a great opinion now? that said, what are the facts now? we have to borrow more, we're not growing the economy. we have to borrow more and that's at the heart. >> gretchen: one of the things that people said when they did the downgrade friday night was, well, how do they have any business doing that when they gave the subprime mortgages triple a mortgages? so many people thought was this sort of a do over like getting

back in good standing? i want to you listen to the charges of criticism. >> we face criticism from governments every time we lower the rating. it's never a popular thing to do. our job is to hold the mirror up to nature. >> gretchen: hold the mirror up to nature. >> you know, it's hard for me to defend the rating agencies. i've been covering them for my entire career. they missed the new york financial crisis in 1970s. they missed enron. they missed the sub prime crisis. they might have caused the subprime crisis. that said, look at the facts here. we are growing massive deficits. the economy is not growing. i wrote a column in the new york post. if you really want to know when this country got on thin ice, it's when the $800 billion stimulus package was failing. so much was riding on that. not just possibly the president's reelection, but also the economy. if you get people back to work, guess what? then tax revenues come in.

then the budget deficit squeezes, and then maybe we don't have a downgrade. he's not going to say that because i tell you, he was very careful. you could see that he didn't want to take sides and he was speaking in this corporate language -- >> eric: off camera, he agreed that had we done some sort of balanced budget amendment to the constitution and not added to our debt, that likely would not have -- >> i remember something way back -- you know what really works? growing the economy. >> steve: that would help. >> that would really help. we need a coherent fiscal party. >> steve: charlie, thank you very much. >> any time. >> gretchen: here are other headlines on monday. seven people have been killed after a crazed gunman goes on a shooting room page in ohio. he was eventually killed in a police stand-off. he first shot his girlfriend, then went next door and killed her brother and four others before taking to the street.

>> then they seen him chase ago kid with a gun shooting, tried to kill him. >> gretchen: candlelight vigil was held to remember the victims. one was apparently a child. no motive has been given. victims' names not yet released. more new details emerging from saturday's deadly nato helicopter attack in afghanistan. u.s. officials saying the chopper like the ones in this video, that they were on their way to help rescue army rangers when it was shot down. 30 americans killed. 22 of them navy seals and they were part of that team 6, the same unit that killed osama bin laden. family members, devastated. >> i just want people to know how much love he had in his heart for people, everybody. >> he really loved what he did and he was doing it for a reason, so america could be free. >> gretchen: all of the bodies have been recovered and will be flown to dover air force base

later on this week. violent riots show no signs of slowing down in london now. they're continuing to spread across the city for the second night in a row, unruly crowds attacking police, setting fire, breaking windows in a number of neighborhoods. so far 160 people have been arrested. at least 35 police officers have also been hurt. the riots began in response to the police shooting of a father of four in a london suburb. those are your headlines. >> steve: let's talk a little about this, one of the problems with staying in new york is the fact that if you're in a hotel, sometimes an ambulance might go by at 1:00 o'clock in the morning, or the garbage truck is there at 2:00 o'clock in the morning, it wakes you up. can you imagine at the millennium hilton across the street from ground zero, that hotel, beautiful hotel, they have got construction going, they say the construction goes six days a week, 16 hours a day,

is driving their customers crazy and a lot of people check out before they're supposed to because they need a good night sleep. >> eric: i was there when the towers came down and i'm very familiar with the whole area. they are right adjacent to the footprint of the world trade center. fortunately or unfortunately, they have to deal with this rebuilding construction noise. but i will tell you they're going to benefit tremendously when this whole complex opens up with the 9-11 memorial and museum, with the tower, the freedom towers. there is going to be demand for those rooms. for them to sue now for 8 million bucks because the noise is loud now, this is short sighted on their part. they should get over it and let this happen. >> gretchen: apparently they're booked up for the 10th anniversary of september 11. so business is doing well. but they claim when somebody checks in for three nights, that sometimes they check out after the first night 'cause they can't do the noise. all i know from living in new york city is i wear ear plugs every night to bed, still living in a quiet little connecticut, or even when i go home to more

quiet, minnesota. once you get that ear plug thing going, hard to give it up. >> steve: spending a bunch of years living here, after a while you can't sleep unless you're hearing ambulances. >> steve: straight ahead, e-mail us about that. do you think the hilton is right to sue? straight ahead, we're expecting a major announcement today from the white house. it wants us to ignore major piece of legislation passed by george w. bush. ignore it! >> gretchen: mike huckabee says we should fire tim geithner and hire donald trump in his place? could he turn the treasury around? both of them, going to be here to respond. ♪ [ male announcer ] heard this one?

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>> eric: democrats are going after the tea party again. listen. >> the fact of the matter is that this is essentially a tea party downgrade. the tea party brought us to the brink of a default. that clearly is on the backs of those who were willing to see the country default, those very strident voices in the tea party. >> gretchen: where is the accountability and bipartisanship and isn't this the type of rhetoric that president obama condemned? >> steve: governor mike huckabee

joins us today from little rock, arkansas. good morning to you, sir. >> good morning. great to be with you. >> steve: we've heard from the democrats. it's the fault of the tea party. never mind they wanted to get the deficits under control. it's their fault! >> it's amazing that the rhetoric that is used in this, words like jihad, terrorist, holding hostage, strapping a bomb to the chest of the economy, rhetoric that we weren't supposed to have anymore and here is something that i think we need to recognize. we need to call the president out on this. he is the head of the democratic party. the democratic party and the republicans, by the way, put out talking points and they put out these communication points. he was the one who said we need civility in our communication. one of two things, either a, he approves of this and he's a hypocrite or having approved of this kind of ridiculous overthe top language against the tea party. or b, he has zero control over his own party, the party of which he is the head. one of those two is the truth. we need to call him out on it and tell him either show up and exert some leadership over your

party, stop this ridiculous language and name calling, or admit you can't even control your party, much less the american economy. >> gretchen: governor, obviously people got together in a room and said, let's call this a tea party downgrade. >> absolutely. >> gretchen: if you go from interview to interview yesterday, you heard those three words lumped together. >> well, in politics, you have, for example, the official committees and they'll get together late at night and they come up not only with the communication memo that goes out early each morning to all the principles, but it also has the key phrases words. if you listen to the interviews, they'll all use the same word. tea party downgrade. they'll say things again like holding hostage, terrorists, the balanced approach. president said it seven times in a 15-minute speech last week. so when you hear these words over and over, these are not the words of people who are creative enough to come up with their own talking points. these are people who are reading from a script. and it frustrates me that you've got people elected to high

positions who can't even come up with their own phrasing. >> eric: what frustrates me because if it were on my show or your show, had they said that, we would have called them out on that. we would say, what do you mean the tea party? aren't they the ones who wanted to stop the spending growth? >> well, and the irony of all of this is that s & p and you had the gentleman on, mr. chambers a few moments ago, and essentially saying they didn't go far enough. they didn't do something bold enough to get the debt and spending under control. gee, i thought that's what the tea party wanted them to do. that was the whole point. so rather than it being a tea party downgrade, it was the fact that they did far too little, far less than the tea party asked them to do. >> steve: somebody big in the tea party is jim demint, senator from south carolina. he says geithner should be canned immediately. geithner says he's going to stick around through the election. but you have got what some have called a game changer. you think somebody, a famous american, should take the job as treasury secretary for 90 days.

who? >> well, i suggested the other day, donald trump. the point is that we need someone who has a completely different outlook than timothy geithner, a man who didn't figure out turbo tax enough to pay his taxes. i said geithner should have never been confirmed. now that we have an absolute train wreck in the economy, and it's like mrs. o'leary's cow becoming the new symbol of the dairy industry. geithner failed the economy and he failed this president. the president needs to have him walk the plank. if not for policy reasons, he needs to do it for the political optics and bringing donald trump in is a real optical game changer. >> gretchen: he'd tell it like it is. thanks so much, governor, because we're actually going to have donald trump on to respond to your proposition. >> we'll see if he takes the job. >> gretchen: all right. so governor huckabee saying we should fire tim geithner and hire donald trump. he's in the building right now. we'll see what he says when he joins us on the couch.

>> steve: could be a pay cut. high school has two valedictorians. one black, the other white. was that to be racially fair? the girl with the higher gpa sure thinks so. she's filing a lawsuit and she joins us live next. ♪ [ male announcer ] this is our beach. ♪ this is our pool. ♪ our fireworks. ♪ and our slip and slide. you have your idea of summer fun, and we have ours. now during the summer event get an exceptionally engineered mercedes-benz for an exceptional price. but hurry, this offer ends august 31st. gotta get that bacon! bacon?! bacon!

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>> gretchen: welcome back. a former arkansas high school student is now suing her school for alleged racial bias. she graduated with a 4.0 gpa and was first in her class. but she had to share the valedictorian honor with another student who is caucasian and had a lower gpa. kimberly wimberley joins me from little rock, arkansas, to share

her story with you. good morning to you. >> good morning. >> gretchen: so i know you were happy to find out that you were the top grade earner in your graduating class. right? you were value dick toian? >> yes -- valedictorian? >> yes, ma'am, i was. >> gretchen: you had a baby during your junior year of high school. many time girls drop out or don't get straight a's. how much more difficult was it for you to maintain those grades? >> it was really difficult. with the help of god and my family, it was possible for me. i say anybody that has a child in high school should never drop out. >> gretchen: so then you got the news that maybe you would have to share the valedictorian honor with another girl. why? >> that's still out for me. i was told because she had more credits than i did, even though we had the same amount of course work, she shouldn't be penalized. but i took that as if we had the

same gpa, yes, we shoop -- she shouldn't be penalized, with my gpa being higher, why am i being penalized? >> gretchen: you had a conversation with her. what did she say? >> we talked and got drinks at sonic. it was the day of graduation. she said she wanted to make sure that i didn't hate her and i had to let her know, i didn't hate you and that it wasn't your fault. it was an administrative decision and i understood that. >> gretchen: you believe that it's a racial decision, you're african-american obviously, you were going to be the solo valedictorian, the other girl is caucasian. you filed a lawsuit against the school. you believe it's based completely on race or the actual gpa? >> i believe it's based mostly on my race because i was black and two, that i had a child in high school that wasn't another good look, i should say. >> gretchen: here is the superintendent's statement,

thomas. the issue that someone is trying to paint is that this was racially motivated, that wasn't an issue with the co-valedictorian, this is an academic issue and policy issue. not a racial issue. how would you respond to the superintendent, kimberly? >> well, i say because he's black, most people would say how could this be a racial issue because she's black and your superintendent is black, when really how did it get to the superintendent in the first place? if it was truly policy issue, wouldn't it have stopped after my counselor, when she already declared me sole valedictorian? why was it the principal had to go back and say, how do i sort this out? >> gretchen: you're asking the school record to be changed, making you the sole valedictorian in the class of 2011. i know you've off to the university of arkansas-pine bluff coming up. you want to be a doctor? >> yes, ma'am. >> gretchen: in what specialty? >> neurology. >> gretchen: the best of luck to you. you've been juggling a lot of things in the last couple of

years. kimberly, thanks for your time today. >> thank you so much. >> gretchen: coming up next on the rundown, we're expecting an announcement from the white house and it's about ignoring a major piece of legislation passed by president george w. bush. you're going to want to hear this one. then texas governor rick perry gets thousands to pray. >> we're going to hear this a number of times. father, we pray for our president. >> gretchen: could those prayers kill his chances of getting to the oval office? our political panel straight ahead. plus, you heard governor mike huckabee say he'd fire tim geithner and hire donald trump. will trump take the job? the donald on the curvy couch, two minutes away. don't steal my coffee, trump!

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>> steve: joining us right now is donald trump. today he's in person. >> i felt guilty. it's always by telephone, maybe sometimes from a bed, you know. obama is not doing a great job and -- >> gretchen: tmi! >> china is ripping us. this is no fun, you have to get up. then they start throwing make-up on you. i hate that. >> steve: comb your hair and stuff like that. >> running my fingers through my hair. >> steve: i bet you do that a lot. today is a big day because s & p has downgraded the united states of america from triple a, which we've been since 1917, to aa plus. >> right. >> steve: what do you think? >> i know standard and poors. i know a lot about them. i watched them over the years. i've watched them do a terrible call on the mortgage market. i watched the guy, mr. chambers in here, he looks like an arrogant guy. i watched beers, he's another one i've been watching, whoever he is. he's another s & p guy. and obviously i'm no fan of obama and what's happening to this country is horrible. but these are arrogant guys that

sat in a room and they had no reason to do it and i think eric would agree with this, no reason to do what they did. and we are certainly not doing well, but if you noticed, during trouble, they're all investing, every country all over the world are going into what treasuries? >> eric: sure. >> they're having a lot of fun at our expense. what i really scoffed at was they said, if you balance the budget, if everybody got together, the democrat, the republicans, obama, if you got them into a room, which you should and got them all together, we did a balanced budget, everything perfect, would you change your mind? and basically the answer is no, i wouldn't. it's from nine to 18 years. >> eric: he did kind of dance around that question. i asked it three times waiting for him to answer it. he danced around it and i'll be perfectly honest to you and this is important. the cameras went off, i said, i don't mean to beat a dead horse, but if we had a balanced budget amendment, would you have downgraded us? he said no, i guess not. because that would have signaled

fiscal responsibility. >> i can see these guys sitting in their little office saying, we're going to take down the united states. >> gretchen: why would they do that, donald? >> because they want the publicity, because they want to restore their reputation. >> gretchen: they would do that for pick uppity? >> yeah, they love it. >> gretchen: you love it. look what's going to happen to wall street. you're saying that these people sat in a room and said let's do it for the fun of it? >> if he just extended, he wouldn't be on your show. so all of a sudden, and you know, the other rating agencies kept it. that doesn't mean they're going to. but that's a business. they're a public company. they're not doing very well. they made some horrible, horrible bets. i would imagine they're being sued all over the place for those bets. i hope they are. but they should not have done, in my opinion, what they did. >> steve: ultimately now, do you think part of their rationale is maybe we can force all the players to the table in washington and they'll finally do something? >> i don't, i don't think that's

their rationale. i think they're having a good time at anybody's expense. when you say to a guy, if we balance the budget with this great country and everybody got along, because it wasn't really on this show because you were grilling him pretty hard and it was hard to get away from that. eric was really grilling him on that. but when we say, if you balance the budget and he said nine to 18 years, he said that on other shows, i think it's ridiculous. >> eric: china, when they heard about the downgrade, made a public statement saying hey, get your house in order. what do you think about china telling us to get our house in order? >> when i've been saying it for a long time, you know better than anything, china is not our friend. they're our enemy. they ask me, are they an enemy? i say absolutely friday and everybody falls off the curvy couch. in this case you won't. but china is not our friend. these guys take advantage of us and laugh at us, they make our product. they manipulate their currency so that our people can't compete. we're rebuilding china and nobody picks up the mantra. we have been rebuilding china.

if we stopped, if we taxed chinese products coming in, china would -- believe me, you talk about somebody going down, china would go down. but we don't have the brain power in our government to do what we have to do. china is a very big problem for us. they're the big problem -- the other big problem is opec, what they're doing with fuel and oil prices. what we really need to solve it is a good economy. good economy solve the everything, medicare, medicaid, social security. it solves everything! people don't talk about that. >> gretchen: look at this from a chinese news agency, criticizing the united states. the u.s. government has come to terms with the painful fact that the good old days when it could just borrow its way out of messes, of its own making, are finally gone. that's what china is saying about us. >> that's very nice of them. tell them we appreciate your advice. >> eric: china has a 20 or $30 billion surplus a month. gentleman man may have the same number. where are they going to go with that number if they don't come here? >> number one and number two,

they're making this year in excess of 300 billion, call it profit, on the united states. they're taking in $300 billion. then i have these people -- i don't want to say they're morons, but free trade -- i don't want to have free trade on somebody ripping us. we do so little business with them, they do so much more business with us, so they're going to make this year -- there was a report last week that the number, the original estimate of 300 billion will be very low. it will be much more than that. so where are the people in washington. then obama has a party in the white house for the president of china. okay? state dinner. you don't have state dinners for people that rip you, to the best of my knowledge. >> steve: we had been triple a rated until this weekend and you look at china, they're double a negative. we got a map that shows folks, china, japan, israel, saudi arabia, and taiwan just some of the nations around the planet that -- planet that are double a

minus. we had mike huckabee on this program -- >> great guy. >> steve: just about 15 minutes ago, and he said that you should take the place of tim geithner. >> wow. mike huckabee said that. well, i have great respect. even if he didn't say that, i have great respect for mike huckabee. he was terrific. i think he would have gotten the nomination. but he had lots of considerations. so if he said that, i'm greatly honored. >> gretchen: would you do it? >> it would be very painful for china and opec. it would be very painful for many of the countries that are just ripping us off. when you look at brazil and all of these countries. we gave $2 billion for brazil to drill oil wells in brazil! it's hard to believe. so well i just appreciate mike huckabee very much. >> eric: what should geithner do? >> i think he should move to another position. i think he should go into the private sector because he certainly hasn't told this nation how to get rich. i think it's time for a change.

obama always said, time for change. you know what the change is? close to default, downgrading, lots of other things. we had some change with obama. i think it's time for president obama to bring in somebody new that knows what he or she is doing. >> gretchen: but that would be admitting that tim geithner failed. >> it's hard to say we're doing great. >> steve: you definitely wouldn't take it, even for 90 days? >> i wouldn't say. honestly, forget me. obama should be calling the smartest people we have in business. >> steve: mike huckabee thinks you're a great negotiator. we need to negotiate our way out of this. >> forget me. it's hard for obama to appoint me after the way i talk about him, in all fairness. you call him incompetent. but you know what? all of a sudden, how come you called him incompetent? no, he's a great genius. sort of like huntsman, the love letters. so obama should be calling,

honestly, my type, guys that have done really well, great business people, to negotiate with china with columbia. crop made $4 billion -- colombia made $4 billion profit on us last year. little colombia, $4 billion! we don't make money with anybody! we don't make money with anybody. it's sad. let's use carl icon. colombia doesn't have a chance if we had henry kravitz negotiating with china. take our great business killers, they'd all do it. we're having a lot of fun. you take some of these great business people and i'll tell you, it would turn this country and we wouldn't be ripped. >> steve: all right. donald trump, it is always a pleasure. thank you very much. >> thank you. next time i'll be in my bed or something. >> steve: that's a visual. in the meantime, 39 minutes after the top of the hour.

the tsa apologizing after refusing to let a pregnant woman through security at denver international airport with her insulin bottle. the woman had asked us not to give her name. >> i was like, excuse me? and he's like, this is at risk for explosives. i got needles that are syringes and yeah, i can't take it through. >> steve: even though they are apologizing, the tsa is still questioning the woman's story, saying, quote, we talked to all of our people and they didn't touch her insulin. >> gretchen: today the white house will announce new waivers exempting new schools from the no child left behind law. they will grant waivers to states preparing kids for college, even if they don't meet all the requirements of the 2001 law. the bill championed by former president george w. bush has been criticized by his opponents

in the past. they claim it sets the bar too high. schools that miss the mark were at risk for losing federal dollars. >> eric: how about some music to get going? diana niad play ago -- playing a trumpet. listen. ♪ >> eric: she's 61 years old and she's trying to become the first person to cross the florida straits without the help of a shark cage. she's relying only on technology and divers. >> i'm standing her at the prime of my life. i think this is the prime when one reaches this age. you still have a body that's strong, but now you have a better mind. >> eric: she did the same swim in 1978, but had to stop because of strong currents. >> steve: that's great. congratulations. good luck. the opening bell less than

an hour away. how will the markets react to the first downgrade in u.s. credit history from triple a? expert analysis coming your way as you can see, down the hall. >> gretchen: texas governor rick perry urged thousands to pray for our president and our future. but will his prayers turn off voters if he decides to get into the presidential race? we debate it coming up.

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>> gretchen: 45 minutes past the top of the hour. a quick headlines, no end in sight to this verizon strike. 45,000 workers from massachusetts to dc out picketing after walking off the job early yesterday morning. no new negotiations have been scheduled. if you've ever had an

incredible urge to smell like a gruff old army general, now is your chance. there is a new clone out called patton, named after the world war ii generals. a percentage of the sales goes to vets and it sells for 25 bucks on amazon. >> steve: patton? thousands attended texas governor rick perry's call to prayer on saturday, called the response. >> father, our heart breaks for america. we see discord at home. we see fear in the marketplace. we see anger in the halls of government. as a nation, we have forgotten who made us. >> steve: some critics say the governor is mixing politics and prayer and that's not a good idea. joining us right now is chris, a democratic strategist.

good morning to you. >> how are you doing? >> steve: you have a problem with that? >> listen, i really don't have a problem with any politician expressing their faith. i think jesus may have had a problem with it. he said in matthew, be careful not to make a show of your religion among men. i can think of nothing that's more showy than holding a prayer meeting in a stadium fit for 72,000 people and putting it on like a rock show. so my question to governor perry is, are you going to govern like a christian where you'll do unto the least of them as you would have done unto christ, saying you have a big budget shortfall in your state right now, are you going to balance it on the backs of the poor and the helpless? i think that's my major problem with him is that not so much that he's praying in public. that he's pretending to be a christian, but not acting like one. >> steve: where did you get that? >> i read it. >> steve: a fellow named kelly shackelford was going to be with us, but he had traffic problems. one of the things he says regarding what you said is it's refreshing that he's humbling himself before the creator rather than thinking he is the creator.

>> you know, that would be great if it was in practice. humbling yourself before the creator, jesus said in matthew, go pray in a closet in your room. not to do it as a show among men. this is not humbling. this is saying, look at me, i'm the biggest christian in the country. i don't think so. i don't think that's the way it is. in fact, one other thing he needs to understand is that jesus also said in matthew, you shall know them by their fruits. and my mom interpreted that as you shall know them by the company you keep. he's hanging out with some people who are saying nasty things about america. >> steve: he's hanging out with people who believe in god and believe we're in a pickle right now and they're looking for divine intervention. >> i think everybody thinks that we're in a pickle and everybody is looking for divine intervention, but christ also said, faith without works is dead. >> steve: you're actually quoting more of the bible than rick perry did and you're complaining -- >> politics and religion, no one is going to invite us to dinner today for this conversation, but i'm not complaining. i really don't care.

>> steve: you do care! listen to what you said! >> i care that he's bearing false witness, that he's saying this is what the christian -- that he's the biggest christian, yet he doesn't govern like one. he's all for the death penalty. he never met a social program he didn't want to cut. there are a lot of people starving and hurting in texas. what is he doing? cutting their program and their subsidies. that's what he cares about. >> steve: he's added more jobs than the entire other 49 states. >> low paying jobs. >> steve: a job is a job. >> without benefits. here in new york -- >> steve: all right. chris, thank you very much. >> thanks for having me. >> steve: meanwhile, opening bell on wall street 51 minutes away. the first bell since our credit took a major slump, a panel of experts next with what it means for your money. let's check in with bill hemmer who hopes he still has some money by the end of the day. >> who knows? the way this thing is going. good morning to you, steve. as you mentioned, the world is watching and so are we when

stocks open at 9:30. that's just a small part of this big story. the future of our country, how to make america strong again. this is all up for debate now. we are learning new information about who the navy seals were trying to help and these operations so much more common than people know. meet the bank bandits. brothers and sisters. they look more like college students. we've got the pictures about what they're all up to. we'll see you in ten minutes on monday. three out of four americans don't get enough vegetables. so here's five bucks to help you buy v8 juice. five bucks. that's a lot of green. go to v8juice.com for coupons. you can count on us. not only kills fleas and tick it repels most ticks before they can attach and snk on us. frontline plus kills but doesn't repel. any tick that isn't repelled or killed may attach and make a meal of us. [ male announcer ] ask your veterinarian about k9 advantix ii.

>> eric: wall street set to open in 47 minutes. how will investors react to the s & p down grade? and what does this mean for your money? we've got a panel of business experts, matt, tom, and dennis, fox business correspondent.

what do you think will happen? i'm looking at the dow jones. the futures look like they're 240 point down. where do you go from there? is there more down side? should investors be worried about this? >> i don't think you should be maybe worried, but not panicked. there is a fine line. i think we'll see weakness early on, but i believe in the first couple hours of trading, we'll see a buying wave come in because people will see bargain bargains. so we'll see some buying, but i think we scale in throughout this week on weakness. you start buying this week. >> eric: tom, let's talk about the individual portfolio. people are saying what am i going to do? my 401(k) took a hit. what should an investor do? >> one thing they should not do is panic and overreact to what's happening. the u.s. will always be the safest place to invest your money. granted, we're going through tough times, but we've been here before. the last three selloffs that we've had like this similar in the bull market that ended after

world war ii was 1975, '99, '98 and after those corrections, the market rallied 18%. so evaluations are very attractive now. when the market settles in, i think people should pick their spots and go in. >> eric: those two guys have pocket squares. what about the guy who is just looking to maybe get by? what about the guy who wants to buy a house? is this bad news or good news? >> i came here to sell hope because a lot of cable newses want a crisis. let's look at some things. nine countries in the last ten or 20 years got downgraded and overall, interest rates went down, not up. that's our big fear, that interest rates will go up because of this. also look at canada. pound for pound, canada is a stronger economy today than the u.s. is. yet, they went through a downgrade somewhere around the early 90s. that was a wake-up call. they got their act together. what if we were to get our act together? goldman sachs, a barish call, they're out saying, we thought the s & p would hit 1450.

>> eric: small businesses, is this a head wind to new hiring? >> absolutely. 'cause what happened is it's taking away confidence. we don't have confidence in the government. our confidence was lacking coming into this. i think the biggest issue i have is the way that washington reacted. washington came out and said, what do you mean? we didn't do anything wrong. >> eric: small business, what about it? can you hire if you're a small business? >> it's a difficult time now because new business creation is at their lowest level since 1983. we've added 75 million people. so new businesses right now are facing a tough time because of this administration. but we have to remember the fact that corporations are sitting on $2 trillion in cash. this is not like 2008. >> and there is 7 trillion around the world. >> eric: we've got to leave it there. we'll keep our eye on the stock market, down 242 right now. more "fox & friends" two minutes away.

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♪ fare thee well ♪ farewell ♪ mr. gloom be on your way ♪ ♪ though you haven't any money you can still be bright and sunny ♪ ♪ sing polly wolly doodle all the day ♪

♪ hah >> gretchen: tomorrow we have laura ingraham, reince